Cobourg store charges browsing fee
Most stores that have loyalty programs rely on a card.
For Paper Lace in downtown Cobourg, the buyer-rewards program involves charging admission to the store in what owner Manfred Schumann termed an exciting new concept that has big rewards for people who make purchases.
Simply put, you pay $2 to browse. But you get that back, and potentially much more, when you make a purchase.
Since April 1, Paper Lace has begun charging the $2 on a voluntary basis. As of July 2, Schumann said, it will be a firm store policy.
Though browsers who don't buy anything don't get their money back, Schumann said, purchasers come out ahead.
"We apply the $2 to your purchase, up to $10, so you get full value for your $2. For purchases over $10, the 20% kicks in — because $2 is 20% of $10, so that's how we arrived at that. If it's a $500 purchase, you get 20% off."
Schumann sees it as a reward for regular customers' loyalty.
"Instead of giving specials and dollars-off to people who are coming in for the first time, we reward people who shop regularly. Our average purchases are such that those customers will benefit from it. Those who come in for the first time and don't buy anything, they don't get any of the benefit. They have to buy something to get the benefit," he said.
"It reverses the cycle of trying to get new customers with specials and making regular customers pay full price, which I have always found obnoxious. Why would I, as a regular customer, pay full price when a newcomer gets a deal?"
Paper Lace will be open July 1, which is the last day the $2 fee is voluntary.
The fee will apply Tuesdays through Fridays, with weekends and Mondays considered open-house days — no $2 fee, but also no discount. It's a great opportunity for free browsing, he said, though customers may choose to look around and then come back on a $2 day to buy what they want at a discount.
Schumann has found the new set-up increases traffic to the store, and says he's getting a fantastic response.
"Everybody just loves it. We tell them about it, that this discount costs you $2, and ask if they want it. They say sure and we ring in the $2, and then we ring in their purchases one at a time with 20% off each one. The savings accumulate to the point that they are very happy."
With a potential 20% discount, he has seen customers put back items in favour of more expensive selections and show more willingness to buy larger items
"It has increased business, which I intended it to do," he said.
It's not an unknown concept. Some clothing stores have been known to charge $2 for browsers to offset the growing numbers of customers who try on fashions, decide what they like, then go home and order them online.
The green flyers available at the Paper Lace cash register explain the finer points — $2 is charged per "buying group," be that an individual or a family, for example. The $2 is referred to as an opportunity share, and it expires when you leave the store. And the 20% savings for purchases that are made also applies to taxes.
It's all for a six-month trial period, Schumann said.
With the voluntary period starting April 1 and the firm-policy period starting July 1, that would mean Sept. 30 is a time to take stock.
"I will analyze to see if we want to continue. If we do, it's a permanent fixture. If there's not a long-term benefit, we will can it right there."